Removal of fuel subsidy saved N5.4trn for Nigeria – Gov Abiodun

The governor of Ogun State Dapo Abiodun was recently quoted as saying that Nigeria’s economic reforms have so far benefited from N5.4 trillion through the elimination of fuel subsidies. This is as Nigeria continues to grapple with discords over the subsidy removal that was embarked upon by President Bola Tinubu on May 29, 2023, when he declared the fuel subsidy regime over.

The mobilization of resources hitherto utilized to fund the subsidy regime has been lauded by Governor Abiodun. He noted that the government had shifted resources towards development from waste. It is expected that the savings will assist Nigeria to overcome or reduce the congestion in the economy such as inflationary rate, and high unemployment frontier as well as offer a feasible option in energy resources such as Compressed Natural Gas (CNG). Opinion of Abiodun, in his opinion, the utilization of CNG will remove the monopolistic attitude of the country toward imported petroleum products and thus cut expenses and bring about stabilization of the economy.

However, critics, including opposition parties such as Atiku Abubakar, have equally dismissed the government’s position of the end of fuel subsidy and accused the government of still paying subsidies in a disguised manner. Atiku said that fuel subsidies may remain despite these modern disguises and added that subsidy payments may hit 5.4 trillion Naira in 2024. This has brought back issues related to transparency and the performance of the country's current administration.

Disputing these allegations and insisting that the regime of fuel subsidy is now history, the federal government has not ceased to be at the center of debates regarding the effects of fuel subsidy removal on the Nigerian economy not to mention the real state of the nation’s energy industry. In his recent reaction to the recent rise in the inflation rate, the Ogun state governor, Prince Dapo Abiodun recently boasted that through the economic reformation, Nigeria is saving N5.4trillion, such high stakes reveal the reality of the current and future reformation of Nigeria economy.